Will Firing MPLA Officials Change Angola’s Negative Economic Outlook?

The ruling People’s Movement for the Liberation of Angola (MPLA) party has made a number of legislative changes and political appointments in recent months to ensure they are well positioned for the polls next year. The biggest political adjustment was the party electing João Manuel Gonçalves Lourenço, a retired general and defense minister, as vice president which makes him the technical frontrunner as successor. They also elected former Prime Minister António Paulo Kassoma as secretary general of MPLA. Finally, President dos Santos replaced his agriculture minister and sacked his Chief of Staff, Edeltrudes da Costa.

However, much attention has been given to firing of Finance Minister Armando Manuel. Angolan newspapers have reported that Manuel’s removal on 5 September was directly linked to the country’s stalled talks in June with the IMF over emergency funding. However, many are questioning whether President José Eduardo dos Santos ever had any intention of taking the US$4.5 billion in loans that the IMF had tabled.

The IMF’s proposed loan to Angola came with a number of stringent clauses that, if accepted, could have resulted in challenging conditions for President dos Santos ahead of 2017 elections.

The strings attached to an IMF Extended Fund Facility would have likely mandated structural adjustments to government institutions and economic policy reform. This would require a marked increase in transparency amongst state-owned companies. Subsequent information revealed could then have put President dos Santos and the MPLA in a precarious position. The Heritage Foundation, a conservative American think tank, ranks Angola 156th in its 2016 Index of Economic Freedom rankings, specifically citing “pervasive corruption.”

Just days before Minister Armando’s removal, the ministry announced that it was cutting its 2016 economic growth forecast to 1.1 percent from 3.1 percent. Meanwhile, S&P’s Global Ratings revised its outlook for the country to negative from stable.

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On the legislative front, Angola’s government created the Angolan Social Communications Regulatory Body in August, a new government authority to “enforce compliance with professional journalistic ethics and standards” and “verify compliance by radio and television operators”.